Reflections on the Architects of Human-made Disasters; or Why Overlaps Often aren’t such a Bad Thing

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By David McRobert (with contributions from Meghan Robinson and Sharon Sam)

For decades I have struggled with an illusive, demanding and unforgiving mistress who has kept up me many nights: my muse asks, “David how can we balance economic goals such as the search for efficiency and efficacy with the stark and unequivocal realities of the ecological systems that underpin our entire economic, social, political and cultural fabric”. She then goes on, reminding me that our legal system establishes an elaborate, deep moat around the private castles which protects the interests of private capital and externalizes many costs associated with doing business in Canada. Taxpayers pay taxes to governments to train and educate workers, build roads, airports and railways, and develop infrastructure at massive expense. It is a stunningly good deal. Free workers. Cheap infrastructure. Minimal taxes.

But China, South America and India beckon. Regulatory systems are more lax. Private property laws related to copyright are viewed differently, allowing entire industries to thrive based on making knock-off products for rapacious North American consumers seeking Coach purses and Rolex watches.

Meanwhile Canadian businesses complain bitterly about over-regulation and excessive paperwork imposed on them by their federal and provincial underlords. But then when we entrust our North American business leaders to operate in a manner that protects the public interest I am usually disappointed – no crushed – by their misbehavior. “Why do you despair,” my muse asks me? “Could it be otherwise?”

The UnCommon Sense of our Ancestors ?
Over the last three decades academic economists trained in the Chicago school such as Milton Freidman and many regulators trained by these thinkers have championed deregulation and streamlining as a massive benefit to the economy. Agencies, think tanks, lobby groups, royal commissions and others supporting this position have included the Economic Council of Canada (now defunct), the Fraser Institute, the Conference Board of Canada, and the Donald Macdonald Royal Commission on Free Trade (1985). In their efforts to reduce “redundancies and inefficiencies” by eliminating overlaps, these organizations have promoted “streamlining” and smart regulation. Unfortunately, this streamlining process often has led to reduced training for employees, fewer employees, a lack of enforcement capability, and the transfer of public duties to private agencies who often prioritize fiscal objectives such as profit-making at the expense of our public priorities. As a result, the Canadian public now faces a serious risk. The reality of the danger posed to the public by the elimination of overlaps and creations of gaps is clearly evident in two public disasters that took place in the past five years: the massive train derailment and fire in Lac-Mégantic, Quebec in early July 2013 and Sunrise Propane explosion and fire in Toronto in August 2008.

But it is essential to bear in mind these are only two examples. The Bhophal disaster in India (1984) where thousands of Indians in the city of Bhopal were immediately killed and ten of thousands of others were permanently blindly or suffered life-crushing lung impairments after the accidental release of isomethyl cyanate produced at a plant operated by Union Carbide is equally shocking and perhaps even more disturbing. The Exxon Valdez oil spill (1989), the massive B.P. Oil Disaster in the Gulf of Mexico (2010) and numerous other smaller inland oil spills caused by North American pipeline operators (including Enbridge) also could be pinned to this wall of shame.

The Lac-Mégantic Quebec explosions occurred between July 5th and July 6th 2013. On July 5th a railway freight train operated by Montreal, Maine & Atlantic (MM&A) parked in Nantes, about 10 km from Lac-Mégantic. The freight train had five locomotives and 72 tank cars filled with crude oil, and one buffer car.

In parking the freight train the engineer applied the air brakes and some of the manual handbrakes. In the case where air brakes fail to function properly, if a sufficient number of handbrakes have been applied, a train will remain in place. Applying handbrakes is a very labour intensive process, requiring the engineer to step on the tank car and manually turn the handbrake (e.g., wheel). Setting each handbrake takes approximately two to three minutes.

During the 1970s freight trains operated with as many as five employees, including two brakemen. These trains usually included iconic cabooses where crew members could rest during the lengthy trips. Last year MM&A received approval from Transport Canada to operate with a one-employee crew. In this case, it meant that one engineer was supposed to apply handbrakes for a railway train that stretched a distance of 1.4 km. The tracks from Lac-Mégantic to Nantes are on a downward grade of 1.2%. Under the railway guidelines, to be safe, at least 41% or 30 to 73 of the handbrakes on this train should have been applied. As of September 2013, the Transportation Safety Board of Canada was still investigating whether the engineer set enough handbrakes.

Shortly after midnight on July 6th there was a fire on one of the locomotives. Firefighters put out the flames on the locomotive and the engine was shut down. Firefighters left. At 12:56 am on July 6th the train started rolling and after traveling nearly 12 km, derailed in Lac-Mégantic. At 1:15 am a number of deadly explosions were triggered. Dozens of businesses and homes were destroyed in the blast. Forty-two people are confirmed dead.

More than 30 buildings in the town’s centre, roughly half of the downtown area, were destroyed. Initial newspaper reports described a 1 km blast radius, making Lac-Mégantic the fourth deadliest rail accident in Canadian history, and the deadliest rail disaster in Canada since the 1864 St-Hilaire train disaster.

Looking at the Lac-Mégantic explosion above, it must be asked, has deregulation; privatization and cost-cutting threatened the environment and public health and safety?

Mark Winfield, an associate professor in the Faculty of Environmental Studies at York University and one of the most cogent and thoughtful observers of environmental policy and politics in Canada for the past two decades, offered the following observations in an op-ed article published in several Canadian newspapers three weeks after the disaster:

“Students of major disasters often talk of the concept of ‘disaster incubation’ – a period of cumulating failures on the part of operators and regulators which eventually overwhelm even multilayered safety systems and lead to tragic outcomes.

No better term could be used to describe the emerging series of failures on the part of railway operators and their safety regulator, Transport Canada that led to the Lac Megantic disaster. Over the past five years there has been an enormous increase in the shipping of petroleum products on Canada’s railways, from 500 car loads in 2009 to a projected 130,000 car loads in 2013. Transport Canada failed to respond to this major change in the kinds of traffic moving over the railway system. Specifically it did not address well-known issues around the safety of the older tank cars being used to carry the bulk of the increased shipments. There were also more general long-term failures to ensure that adequate regulatory controls were in place to make sure that trains carrying dangerous goods were operated safely and parked securely.”

Winfield’s observations are prescient and powerful. Unfortunately, as noted above, the disaster in Lac-Mégantic is not the first disaster created by streamlining processes, as noted above.

The Sunrise Propane explosion

As part of the Harris government’s attempts to cut costs, including public payroll and the overall size of the civil service, a private agency called the Technical Standards and Safety Authority (TSSA) was established in 1996. The TSSA was delegated responsibility via an administrative agreement made under the Safety and Consumer Statues Amendment Act (SCSAA).

The TSSA is managed and administered by a board of directors, the majority of who are drawn from and nominated by the industrial sectors whose activities it regulates. This gives rise to potential conflicts of interests as board members may be tempted to favour the interest of industries over the interests of the general public.

A further potential area of conflict is the TSSA’s authority to retain membership fees and administrative penalties. These penalties are a source of revenue for the TSSA. This contrasts to fines, which go directly to the Ministry of Finance. As a result, a strong incentive exists for the TSSA to apply administrative penalties rather than initiate prosecutions, even for serious violations.

It is also crucial to note that as a private agency the TSSA is exempt from government rules about procurement, employment, and access to information. Thus TSSA holds an interesting position in relation to the delivery of public services.

On August 10, 2008 the explosions at Sunrise Propane claimed the lives of two people, Parminder Singh Saini, an employee of Sunrise Propane, and a firefighter that suffered a heart attack at the scene.

The explosions caused widespread damage to local homes and businesses and injured several members of the public. The explosions also resulted in a discharge of contaminants, including asbestos, from the site onto the surrounding properties in a wide radius around the site. Authorities evacuated 12,000 residents within a 1.6 km radius of the Sunrise facility.

The initial cause of the explosion was a truck-to-truck transfer of liquid propane. At the time of the explosion, Sunrise only had a licence to use a refill centre, and did not hold a filling plant license. As a result, the truck-to-truck transfers that were being performed, were being done illegally. While Sunrise was in the process of upgrading their facilities to allow them to obtain the filling plant licence, they were not yet licensed.

A TSSA inspector for the Fuel Safety Division had inspected the Sunrise facility on October 27, 2006 and had noted some minor incidence of noncompliance. One of the infractions noted was that an employee working at the facility at the time of inspection did not have the required training for filling propane cylinders. This is disturbing as one of the main questions at the trial following the explosion, was whether the directors of Sunrise acted with due diligence in ensuring that all of their employees were fully trained in propane handling.

Prior to the explosion it was not a requirement that employees needed to be trained by their employers. Instead, employees only needed to hold a valid PP03 licence. The training for these licenses could be provided by assorted certified trainers. These trainers were not required to maintain records of the people they had trained. As a result there was no central database of licensees. The lack of a centralized system impacted determining responsibility in the case of Sunrise, as all employees files had been destroyed by the explosions.

A second infraction noted by the inspector related to a transfer hose used for loading and unloading propane. The hose was connected to the body of a cargo liner on a reel and was unattended. The danger posed by this is that a person could get into the truck and drive away with the hose connected. The third deficiency involved a parked truck without an approved braking method. There were no chock-blocks placed behind the wheels.

Although three infractions were noted, no fines were issue by the inspector. However, a Fuel Safety Inspection Report was issued requiring Sunrise to comply with the Director’s Public Safety Order by November 9, 2006.

The TSSA inspector was aware that truck-to-truck transfers were being conducted at Sunrise. On November 9th, 2006 the same Fuel Safety Division inspector was assigned by his manager, to go to Sunrise Propane to ensure that Sunrise understood the Director’s Order of October 31, 2006 regarding truck-to-truck transfers of propane. It was to be made clear that these transfers were no longer allowed to take place at Sunrise. However, it has been suggested that during this meeting the inspector said that Sunrise’s business could be carried out as usual and that “the TSSA was not in the business of putting people out of business.”

On May 29, 2007 the inspector returned to the facility located at 54 Murray Road to conduct another inspection and noted that a delivery hose of a cargo liner was attached to the storage tank again. He issued a “Fuel Safety Inspection Report” requiring the deficiency to be addressed by June 26, 2007. The client was charged “double time” as this was a repeat infraction. However, a more appropriate reaction would have been for the TSSA to suspend Sunrise’s operations that day.

Given the history of infractions, the facility should have been issued a cease and desist order rather than be given a slap on the wrist and several days to comply. At the very least the facility should have been monitored more closely because they were known to keep a truck on the premises that exceeded their licensed storage capacity while they were waiting for the filling plant license.

After the explosion, the TSSA was strongly criticized for failing to protect the public by not shutting down Sunrise after multiple violations had been noted. The fact that the TSSA did not have an accurate list of the propane facilities it regulates was also a concern. How could the TSSA not maintain an accurate list of the facilities its staff were responsible for inspecting on a regular basis?

All the charges laid against Sunrise were “strict liability” offences, meaning that the defendants could avoid liability by proving that they had exercised due diligence. At trial, Sunrise relied on the defence of “officially induced error” regarding the second count charged, stating that the TSSA inspector had given them permission to carry on business as usual. They believed that they were acting in a lawful manner at all times. This was the only count of seven charged under Environmental Protection Act offences that Sunrise was found not guilty of at trial.

As a result of the Sunrise Propane case, the TSSA has introduced stronger policies and procedures. On August 21, 2009 a Record of Training Policy Document was issued by the TSSA and posted on their web site. As of December 31, 2008, Ontario Regulation 215/01 – Fuel Industry Certificates was amended under the Technical Standards and Safety Act, 2000 by Ontario Regulation 441/08 requiring accreditation of training providers. All existing training providers’ licenses would expire December 31, 2009. As of January 1, 2010 all training providers must provide evidence that they have the subject matter and practical experience in the matters on which they will be providing training for. All accreditation will only be valid for three years.

The TSSA’s website states that:

The TSSA administers the certification of occupations regulated under the Technical Standards and Safety Act, 2000 and helps ensure all certification programs are responsive to industry needs through a Training and Certification Advisory Board (TCAB). Comprised of industry representatives, the TCAB for Fuels-Related Technicians assists us in developing training standards, shaping certification policies and procedures, disseminating information to the industry and review of regulations. Working in partnership with industry, TSSA’s aim is to continuously improve certification services in our endless pursuit of greater public safety.

What the Sunrise example illustrates is that the privatization process introduced by the “Common Sense Revolution” probably was rushed, poorly thought out, and created a serious risk to the public.[8] All we can hope for is that both private and public organizations like the TSSA, the Ministry of Environment and the Ministry of Labour have learned from the Sunrise disaster and will work to put the public safety interests above those of the fiscal streamlining and industry.

The summary of the Sunrise Propane case that appears above was prepared by Meghan Robinson while she was working as a paralegal student for David McRobert in June 2013. This blog article also reflects research and contributions from Sharon Sam, a third year law student at the University of Ottawa.